3/21/2022 9:42 AM

Marilyn Burgess - District Clerk Harris County

Envelope No. 62774566
By: Adiliani Solis
Filed: 3/21/2022 9:42 AM

CAUSE NO. 2022-10250

MEGAN PETE P/K/A, § IN THE DISTRICT COURT OF

MEGAN THEE STALLION, §
Plaintiff, §
§
v. § 152ND JUDICIAL DISTRICT
§
1501 CERTIFIED ENTERTAINMENT, §
LLC, §
Defendant. § HARRIS COUNTY, TEXAS

DEFENDANT 1501 CERTIFIED ENTERTAINMENT, LLC’S

ORIGINAL ANSWER AND COUNTERCLAIMS

Defendant 1501 CERTIFIED ENTERTAINMENT, LLC (“1501”) files its Original

Answer and Counterclaims as follows:

SUMMARY OF LAWSUIT

Megan Pete p/k/a Megan Thee Stallion (“MTS”) is a performing artist. 1501 is the record

company that discovered MTS and signed her several years ago, when no other record labels were

interested in doing so.

This is MTS’s second lawsuit against 1501. In her first lawsuit, MTS made outrageous

claims that she never was able to prove. Ultimately, MTS and 1501 negotiated and signed a

Settlement Agreement that amended MTS’s original record contract. That Settlement Agreement

was signed by the parties, who were each represented by multiple attorneys. As part of the

Settlement Agreement, attorneys representing each of the parties signed a Joint Notice of Nonsuit

with Prejudice. But MTS’s lawyers never filed the Settlement Agreement or Joint Notice of

Nonsuit with Prejudice with the Court, and MTS denied the existence and enforceability of that

Settlement Agreement while accepting benefits under it.

 1501 filed a motion to enforce the Settlement Agreement and dismiss MTS’s first lawsuit.

A hearing on that motion was scheduled for Friday, February 25, 2022. A week before the hearing,

MTS voluntarily dismissed her first lawsuit to avoid the hearing.

On Friday, February 18, 2022, MTS filed this second lawsuit against 1501. After denying

the validity of the signed Settlement Agreement in her first lawsuit, MTS has admitted it in her

second lawsuit. See Original Petition, ¶ 13.

The sole issue in MTS’s second lawsuit is whether the recording “Something for Thee

Hotties,” which MTS released on October 29, 2021, is an “album” that satisfies her recording

commitment under her contracts with 1501. It is not such an “album.”

“Something for The Hotties” is made up of 21 recordings and includes spoken interlude

recordings on which MTS does not appear as well as several previously-released recordings. It

was not original material and included freestyles available on YouTube and archival material from

as far back as 2019. The result is that the total duration of new recordings featuring MTS is only

29 minutes long. The recording was described in the music press as a compilation record of

archival materials and some new recordings. MTS herself described the release on social media

as, “Freestyles y’all been asking for plus a few unreleased songs from my archives to hold y’all

over . . . .”

MTS knows that each “album” must include at least twelve new master recordings of her

studio performances of previously-unreleased musical compositions. She also knows that 1501

gets to approve the musical compositions to be included on each album. And MTS knows that

none of that happened here. MTS also knows that these provisions are common and that they

appear in most record contracts for good reason. And MTS’s lawyers know that these requirements

have been upheld in other lawsuits in the past.

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 MTS never sought 1501’s approval for “Something for The Hotties.” Indeed, 1501 only

learned of the release hours before it came out. By letter dated January 5, 2022, 1501 advised

MTS’s lawyers that the most recent release is not an “album” under her contracts. MTS’s lawyers

did not respond until January 24, 2022. 1501 replied three days later. MTS filed her second lawsuit

without notice or discussion on February 18, 2022.

MTS’s new lawsuit is groundless because, as she knows, “Something for The Hotties” does

not meet the requirements of an “album” under the three contracts that she has signed with 1501.

GENERAL DENIAL

1. Under Rule 92 of the Texas Rules of Civil Procedure, 1501 generally denies each

and every allegation in the Original Petition. 1501 respectfully requests that MTS be required to

prove her claims, charges, and allegations by a preponderance of the evidence, clear and

convincing evidence, and/or beyond a reasonable doubt, as required by the laws, regulations, and

statutes of Texas and the United States and the Constitutions of the State of Texas and the United

States. See TEX. R. CIV. P. 92.

ADDITIONAL AND/OR ALTERNATIVE DEFENSES AND DENIALS

2. Pleading further and in the alternative, without waiving the foregoing, 1501 asserts

the following separate, additional, conjunctive, and/or alternative defenses, including affirmative

defenses, and denials to the Original Petition (and any subsequently filed pleadings), and each

purported claim or cause of action contained therein.

3. The occurrence in question and/or MTS’s alleged injuries and damages, if any, are

the result, in whole or in part, of MTS’s own acts, omissions, fault, negligence, mistake, and/or

other conduct.

4. MTS cannot recover on her claim due to the doctrine of waiver.

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 5. MTS cannot recover on her claim due to the doctrine of estoppel, including estoppel

by contract, equitable estoppel, and/or promissory estoppel.

6. In the event 1501 is found liable to MTS, any such liability being expressly denied,

1501 is entitled to contribution, credit, and/or indemnity, as provided by the laws and statutes of

Texas including, but not limited to, the provisions of Chapters 32 and 33 of the Texas Civil Practice

and Remedies Code, as well as other applicable laws and statutes.

7. Without waiving the foregoing and for further answer, if any be necessary, 1501

has not knowingly or intentionally waived any applicable defense, whether affirmative or

otherwise, and hereby gives notice that it reserves the right to assert and rely upon such other

applicable defenses as may become available or apparent during this proceeding.

COUNTERCLAIMS

I. INTRODUCTION

8. On March 2, 2020, MTS filed her first baseless lawsuit against 1501. See Megan

Pete p/k/a Megan Thee Stallion v. 1501 Certified Entertainment, LLC, et al., Cause No. 2020-

14018, in the 152nd Judicial District Court of Harris County, Texas.

9. MTS filed that initial lawsuit to try to force her record company (1501) to

renegotiate aspects of her very first recording contract that she no longer liked after she signed

with new management at Roc Nation.

10. Even though MTS’s claims were unfounded, 1501 sought to address her concerns,

and the initial case was settled in a written agreement signed by the parties on March 1, 2021.

11. MTS has accepted the benefits to her under the Settlement Agreement, but she has

refused to comply with the provisions she does not like including one directing the parties to file

a Joint Notice of Non-Suit with Prejudice. Instead, MTS continued to pursue the case she had

already settled for almost one year.

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 12. Faced with an impending hearing on 1501’s Motion to Enforce the Settlement

Agreement, which MTS knew she would lose, MTS summarily (and without any notice to 1501)

filed a non-suit without prejudice in the initial lawsuit, on February 16, 2022.

13. Only two days later, on February 18, 2022, MTS filed this lawsuit against 1501.

14. MTS’s claim for declaratory judgment in this lawsuit is wholly without merit. MTS

distorts the recording commitment that she contractually owes to 1501 and, indeed, her Original

Petition does not even mention the distribution agreement between Theory Entertainment LLC

d/b/a 300 Entertainment (“300 Entertainment”), 1501, and MTS which defines an “album.”

15. Under the contracts executed between the parties, “Something for Thee Hotties”

plainly does not meet the requirements for an “album” that satisfies MTS’s recording commitment.

1501 seeks a declaration to that effect, as well as its attorneys’ fees and costs.

16. In addition, MTS has repeatedly breached her contracts, and 1501 seeks to recover

money damages based on those breaches, as well as its attorneys’ fees and costs.

II. JURISDICTION

17. This Court has subject matter jurisdiction over this dispute and jurisdiction to grant

all relief requested by 1501. TEX. GOV’T CODE § 24.008. The amount in controversy is within the

jurisdictional limits of this Court. TEX. GOV’T CODE § 24.007.

III. DISCOVERY CONTROL PLAN

18. 1501 intends that discovery be conducted under Level 3 of the Texas Rules of Civil

Procedure.

IV. FACTUAL BACKGROUND

19. This suit arises out of a February 3, 2018 Exclusive Artist Recording and

Performance Contract (the “Artist Agreement”) between MTS and her record label, 1501.

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 20. MTS signed with 1501 in 2018 after its CEO, Carl Crawford, discovered her and

recognized her many talents. Mr. Crawford took a big risk on MTS and has spent his time, energy,

and money to help to develop MTS into the success she is today.

21. Mr. Crawford is from Houston, and he is well-known for his baseball career,

playing on the Tampa Bay Devil Rays, the Boston Red Sox, and the Los Angeles Dodgers.

22. After he retired from baseball in 2016, Mr. Crawford decided to pursue his dream

of joining the music industry by creating 1501 with long-time friend Travis Farris, an industry

veteran known as “T. Farris.”

23. Mr. Crawford discovered MTS on social media. When Mr. Crawford saw MTS

perform, he knew there was no one else like her in the music industry, particularly from Houston,

and he told Mr. Farris they needed to sign her.

24. After signing MTS, Mr. Crawford decided to bring onboard James Prince (known

as “J. Prince”) and 300 Entertainment, as a record distributor, at the end of 2018, with the goal of

benefitting promising, young artists like MTS.

25. Mr. Prince is the godfather of Houston rap music, and he has a long history of

identifying, developing, and promoting talented, well known rap artists such as the Geto Boys.

26. 300 Entertainment has similarly worked with a wide range of popular rap artists,

including Young Thug and Fetty Wap. Indeed, 300 Entertainment (and specific employees at 300

Entertainment) have won music industry awards for their marketing and promotion of MTS’s

music career.

27. Mr. Crawford has similarly received recognition from Billboard for his work with

MTS.

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 28. Mr. Crawford also brought on Gee Roberson, who has a long history in the record

business as Chairman of Geffen Records and of discovering, producing, and managing rap artists.

Mr. Roberson has played a key role in the careers of artists such as Kanye West, Lil Wayne, Drake,

T.I., Nicki Minaj, G-Eazy, and Lil Nas X.

29. MTS was satisfied with 1501 until September 2019, when she entered into a

management agreement with a new agency, Roc Nation, after the passing of her mother, who was

a Houston rap artist herself and who had previously served as MTS’s manager.

30. Roc Nation is notorious in the music industry for trying to persuade its management

clients to leave their record labels and sign with Roc Nation’s affiliated label. The acrimony

between the parties began with Roc Nation’s involvement.

31. On the advice of Roc Nation, and without providing 1501 with the contractually

required notice under the Artist Agreement or complying with the Artist Agreement’s arbitration

provision, MTS filed a lawsuit on March 2, 2020 against 1501 and Mr. Crawford in an attempt to

use her newfound success to renegotiate the Artist Agreement, which she signed when she was

unknown.

32. 1501 and Mr. Crawford listened to MTS’s concerns, however unsubstantiated, and

attempted to work with her because MTS still owes 1501 two more albums.

33. On March 1, 2021, MTS and 1501 reached a settlement covering the initial lawsuit,

and they memorialized their agreement in a written settlement agreement (the “Settlement

Agreement”), amending certain provisions of the Artist Agreement.

34. Therefore, as of March 1, 2021, all of MTS’s claims related to the Artist Agreement

were fully released. In light of the settlement and release, the parties agreed to advise the Court

that the initial lawsuit had settled and to file a Joint Notice of Nonsuit with Prejudice.

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 35. Despite having renegotiated certain provisions of the Artist Agreement and having

fully released all of her claims, on August 24, 2021, MTS filed a supplemental petition in the initial

lawsuit, attempting to assert additional claims and add 300 Entertainment and Mr. Prince as

defendants. MTS’s supplemental petition failed to advise the Court that the Artist Agreement had

been amended through the Settlement Agreement and that all of MTS’s claims had been released.

36. MTS’s actions were in direct violation of the parties’ Settlement Agreement.

37. Accordingly, 1501 sought to enforce the Settlement Agreement, and 1501’s Motion

to Enforce the Settlement Agreement was scheduled to be heard by the Court on February 25,

2022.

38. Faced with an impending hearing on 1501’s Motion to Enforce the Settlement

Agreement, which MTS knew she would lose and would then be forced to pay 1501’s attorneys’

fees, MTS summarily (and without any notice to 1501) filed a non-suit without prejudice in the

initial lawsuit on February 16, 2022, only nine days before the hearing.

39. Two days later, on February 18, 2022, MTS filed this lawsuit against 1501, seeking

a declaration that “Something for Thee Hotties” constitutes an “album” that satisfies her recording

commitment as laid out in three contracts signed by the parties.

40. MTS distorts the recording commitment that she contractually owes to 1501 and,

indeed, her Original Petition does not even mention the distribution agreement between 300

Entertainment, 1501, and MTS, which also governs the album requirements of which MTS

complains.

41. Under the contracts executed between the parties, “Something for Thee Hotties”

plainly does not meet the requirements for an “album” that satisfies MTS’s recording commitment.

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 42. In addition, MTS has repeatedly breached both the Artist Agreement and the

Settlement Agreement by refusing to account to 1501 for her various collaborations, sponsorships,

endorsements, and side engagements.

43. MTS has refused to provide the requisite documentation she owes to 1501 related

to these various side deals, and she has also refused to pay the contractually agreed amounts due

to 1501 related to these side deals.

44. Further, by refusing to comply with the provision of the Settlement Agreement

directing the parties to file a joint notice of non-suit with prejudice in the initial lawsuit, and instead

continuing to pursue the case she had already settled, MTS has also damaged 1501 by causing it

to incur unnecessary attorneys’ fees and costs.

V. CAUSES OF ACTION

A. Declaratory Judgment

45. 1501 incorporates by reference all of the foregoing paragraphs for all purposes.

46. This cause of action is brought under Chapter 37 of the Texas Civil Practice and

Remedies Code as there is an actual and justiciable controversy between the parties.

47. 1501 seeks a declaratory judgment, declaring that:

a. “Something for Thee Hotties” is not an “album” under the contracts

between the parties;

b. “Something for Thee Hotties” does not meet MTS’s “Minimum Recording

Commitment” or “Product Commitment” for the second option period

under the contracts between the parties.

B. Breach of Contract (Artist Agreement)

48. The Artist Agreement is a valid and binding contract between the parties.

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 49. MTS has breached Section 3(d)(vi) of the Artist Agreement by not providing 1501

with all documentation related to the various collaborations, sponsorships, endorsements, and side

engagements entered into by MTS.

50. MTS has breached Section 18 of the Artist Agreement by not notifying 1501 in

advance of all side engagements and by accepting and moving forward with side engagements

prior to receiving approval and permission from 1501.

C. Breach of Contract (Settlement Agreement)

51. The Settlement Agreement is a valid and binding contract between the parties.

52. MTS has breached Section 7(d) of the Settlement Agreement by not promptly

providing 1501 with a copy of her administration agreement (and all related agreements,

amendments, and side letters) with any music publishing company.

53. MTS has breached subsection (d) of Section 9(b) of the Settlement Agreement by

not promptly providing 1501 with copies of all executed Entertainment Rights agreements.

54. MTS has breached subsection (d) of Section 9(b) of the Settlement Agreement by

not using reasonable efforts to cause applicable third parties entering into Entertainment Rights

agreements with MTS to pay the Label Share of Entertainment Income directly to 1501 at the same

times on the same terms as paid to MTS.

55. MTS has breached subsection (e) of Section 9(b) of the Settlement Agreement by

not accounting to 1501, and not promptly paying 1501, the Label Share of Entertainment Income

generated after the accounting reconciliation between the parties. This claim is only directed at

Entertainment Income that is not covered by the accounting reconciliation and pending arbitration

between the parties.

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 56. MTS has breached Section 12(g) of the Settlement Agreement by not filing the

agreed Joint Notice of Nonsuit with Prejudice in the initial lawsuit and, instead, continuing to

pursue the initial lawsuit after settling the case and releasing her claims.

VI. ATTORNEYS’ FEES

57. Pursuant to Chapter 37 of the Texas Civil Practice and Remedies Code, 1501 is

entitled to recover its reasonable, necessary, equitable, and just attorneys’ fees incurred in this

action, as well as costs.

58. Pursuant to Chapter 38 of the Texas Civil Practice and Remedies Code, 1501 is

entitled to recover its reasonable attorneys’ fees incurred in this action, as well as costs.

59. Pursuant to Section 26(e) of the Artist Agreement, 1501 is entitled to recover

reasonable attorneys’ fees and costs.

VII. CONDITIONS PRECEDENT

60. All conditions precedent for bringing these counterclaims have been satisfied.

VIII. DAMAGES

61. Pursuant to Texas Rule of Civil Procedure 47, 1501 seeks all damages proximately

caused by MTS’s misconduct, including monetary relief over $1,000,000. Those damages are well

in excess of the minimum jurisdictional limits of this Court.

62. 1501 further seeks the recovery of attorneys’ fees and costs. In addition, 1501 seeks

non-monetary relief, as described herein.

IX. JURY DEMAND

63. 1501 demands a trial by jury on all issues.

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 PRAYER

For the reasons set forth above, 1501 respectfully prays for the following relief:

(1) Judgment that MTS take nothing by reason of this lawsuit and that 1501 is forever

released and discharged;

(2) A declaratory judgment as follows:

a. “Something for Thee Hotties” is not an “album” under the contracts

between the parties;

b. “Something for Thee Hotties” does not meet MTS’s “Minimum Recording

Commitment” or “Product Commitment” for the second option period

under the contracts between the parties;

(3) Judgment for 1501 and against MTS for all actual damages;

(4) Judgment for 1501 and against MTS for attorneys’ fees, including contingent attorneys’

fees in the event of appeal;

(5) Costs of court;

(6) Pre-judgment and post-judgment interest at the highest rate allowed by law; and

(7) Such other and further relief, both general and special, at law and in equity, to which

1501 is justly entitled.

Dated: March 21, 2022 Respectfully submitted,

/s/ Steven M. Zager

Steven M. Zager
KING & SPALDING LLP
500 W. 2nd Street, Suite 1800
Austin, Texas 78701
Tel: (512) 457-2000
Fax: (512) 457-2100
szager@kslaw.com

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 Lohr Beck (pro hac vice forthcoming)
Lauren Newman (pro hac vice forthcoming)
KING & SPALDING LLP
1180 Peachtree Street, NE
Atlanta, GA 30309-3521
Tel: (404) 572-4818
Fax: (713) 572-5100
lohr.beck@kslaw.com
lnewman@kslaw.com

Counsel for Defendant and Counterclaimant

1501 Certified Entertainment, LLC

CERTIFICATE OF SERVICE

I hereby certify that a true and correct copy of the foregoing was served on all counsel of

record through the Court’s electronic filing and service system on the 21st day of March 2022.

/s/ Steven M. Zager

Steven M. Zager

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 Automated Certificate of eService
This automated certificate of service was created by the efiling system.
The filer served this document via email generated by the efiling system
on the date and to the persons listed below. The rules governing
certificates of service have not changed. Filers must still provide a
certificate of service that complies with all applicable rules.

Jeremy Worsham on behalf of Steven Zager

Bar No. 22241500
jworsham@kslaw.com
Envelope ID: 62774566
Status as of 3/21/2022 11:22 AM CST

Case Contacts

Name BarNumber Email TimestampSubmitted Status

Bradley HancockHancock brad.hancock@hklaw.com 3/21/2022 9:42:46 AM SENT

Andrea James andrea.james@hklaw.com 3/21/2022 9:42:46 AM SENT

Megan Schmid Megan.Schmid@hklaw.com 3/21/2022 9:42:46 AM SENT

Jeremy Worsham jworsham@kslaw.com 3/21/2022 9:42:46 AM SENT

Laruen Newman lnewman@kslaw.com 3/21/2022 9:42:46 AM SENT

Lohr Beck lbeck@kslaw.com 3/21/2022 9:42:46 AM SENT

Steven M. Zager 22241500 szager@kslaw.com 3/21/2022 9:42:46 AM SENT